U.S. cold, Chinese growth help lift oil above $102

The price of oil closed above $102 a barrel Tuesday on expectations that cold weather in the U.S. and steady Chinese growth will underpin demand.

Benchmark U.S. crude for March delivery closed up $2.13 to $102.43 a barrel on the New York Mercantile Exchange.

At the gas pump, the average price of a gallon of gasoline is $3.37. That’s up 6 cents from a week ago, and down 36 cents from this time last year.

Severe cold weather has been boosting energy prices, with a prolonged wave of snow and cold temperatures hitting the East Coast most of the winter.

“Another snowstorm in the U.S. is likely to keep heating demand at a high level and spark a further decline in the already severely diminished stocks of heating oil and natural gas,” said analysts at Commerzbank in Frankfurt in a note to clients.

Optimism that China’s economy is still healthy after credit growth increased in January also helped lift energy prices.

Meanwhile, a new round of talks began Tuesday between Iran and six world powers on finalizing a deal to control Iran’s nuclear program. The outcome could have an effect on oil prices as Iran is a major oil producer and reduction of sanctions would allow the country to export more of its crude.

A weaker dollar also supported oil prices by making commodities like oil cheaper for traders using other currencies. On Tuesday, the euro was up 0.3 percent at $1.3747.

Brent crude, a benchmark for international oils, rose $1.28 to $110.46 barrel on the ICE Futures exchange in London.